Compensation and Benefit Trends 2018: Modest Increase in Salaries as Voluntary Turnover Rises in Thailand
Technology Companies in Asia-Pacific Plan for Robust Salary Increase in 2019
Bangkok, 15 November 2018—The average salary increase across industries surveyed in Thailand is expected to rise slightly from 5.2% to 5.3% in 2019, according to the Total Compensation Measurement (TCM) Study and Benefit Survey 2018 conducted by Aon (NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement, and health solutions. Companies in the Life Sciences industry (Pharmaceutical) report the highest increase rate at 7.2% as a result of superior business performance across the industry and an increased focus on retaining good talent.
Performance level of employees continues to drive pay with top performers getting higher total variable pay than other employees on average.
The survey also reveals that turnover rate in 2018 has increased to 16.9% from 16.6% in 2017. This is driven mainly by a growing job market and a younger workforce. From the study, top three reasons that attribute to turnover are 1) better external opportunity, 2) limited growth opportunity internally, and 3) equity of compensation.
Mr. Panuwat Benrohman, Partner and Managing Director—Talent, Rewards and Performance, Aon Thailand said: “Increase in turnover isn’t surprising in the current business landscape. The new generation workforce generally does not want to wait for a year to earn an average salary increase when they can get a much higher increase with a change of employer.”
Other key findings of the Thailand TCM Study and Benefit Survey 2018 are:
Retirement Benefit (Provident Fund)
Group Accidental Insurance
Company Car and Transport Allowance
Mr. Panuwat added: “The key challenge faced by HR professionals in this age of disruption is how to attract and retain the right talent, as well as maintain healthy dynamics between new and existing employees. Thai companies must invest in creating a holistic employee experience and motivate current and future top talent to achieve their business objectives.”
The Total Compensation Measurement Study and Benefit Survey includes more than 1,700 participating organisations across 180 countries around the world. This year, there were 146 participating organisations across all key industries in Thailand.
Salary budgets are expected to increase in China, India, Japan and South Korea in 2019, but remain flat at 4.0 in Singapore
The prevalence of technology companies across Asia-Pacific with aggressive hiring plans rose for the second consecutive quarter. In Singapore, the percentage of technology companies that plan to hire aggressively increased to 4.9%
Singapore, 9th November 2018— Salary increase budgets at technology companies are expected to increase in China, India, Japan and South Korea in 2019 according to new data from Radford, a division of the rewards solutions practice at Aon plc (NYSE: AON). In Singapore, salary budgets are expected to remain flat at 4.0% in 2019. The fast-growth, developing markets of China and India report the highest increases in salaries at 7.8% and 10.5%, respectively.
Median Overall Salary Increase Budgets
Meanwhile, technology companies across Asia-Pacific also report increasingly optimistic hiring plans despite battling high employee turnover at the same time. The prevalence of technology companies reporting aggressive hiring plans— defined as actively planning and recruiting for organisational growth— increased during the third quarter of this year in five of eight key Asia-Pacific markets. In Singapore, the percentage of technology companies that plan to hire aggressively increased for the second consecutive quarter to 4.9%. Companies reporting aggressive hiring plans in India saw the biggest jump with an increase from 16.8% in Q2 2018 to 21.1% in Q3 2018.
Percentage of Technology Companies Reporting Aggressive Hiring Plans
Voluntary employee turnover— another key metric on the health of the overall technology sector— is up for the past quarter in six out of eight markets. Voluntary employee turnover is highest in Australia at 13.8% followed by China (13.7%), Singapore (13.2%) and India (12.6%).
Average Voluntary Employee Turnover at Technology Companies
While salary increase budgets are forecasted to be up in several markets, merit increases alone won’t be enough to hire, engage and retain talent in a hot labor market. “Companies must assess what jobs are needed for future growth and hire for those roles in a competitive marketplace while also engaging and retaining their current talent when many other job opportunities exist. Businesses with a voluntary turnover of above 10% should evaluate their employee value proposition and talent practices carefully” says Alexander Krasavin, Partner and Radford Leader for Asia Pacific, Middle East, and Africa.
For further information about Radford Global Technology Survey, visit: radford.aon.com